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A bumpy ride for the Tories, by Philip Johnston

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30 September 2005

As the Conservatives gear up for their Blackpool conference next week, they face their most important leadership contest in more than 40 years. Philip Johnston analyses the policies behind the beauty contest

Blackpool in October is never short of entertainment, but the resort town will next week play host to a political event that will offer an alternative to the illuminations and the Pleasure Beach for fun and games. Not even the remake of Pride and Prejudice can match the passion and drama of this year's Conservative Party conference as the activists search desperately for their very own Mr Darcy. Will it be the young, dashing Old Etonian, David Cameron, or the slightly roguish David Davis? Perhaps the activists will swoon for Liam Fox, the GP with the bedside charm, or even for the ageing roué himself, Kenneth Clarke?

With the Tories throwing out their proposed leadership rule change, it is possible we will not even know the answer to this question by the end of the year. This will be eight months after Michael Howard announced his intention to stand down following the Conservatives' third successive election defeat. The protracted nature of this leadership campaign readily lends itself to admittedly flippant comparisons such as that above, although the Forsyte Saga might have been a more appropriate literary analogy. As the Tories head for Blackpool, they must feel themselves to be bit-part players in a long-running soap opera in which the main characters chop and change, but the plot stays the same.

Will it be any different this time? Given the personalities involved in this contest, they offer Tories radically different options for the future. A David Davis leadership, which seems most likely, will commit the party to lower taxes, a smaller state, greater 'localism', radical public service reform and more emphasis on individual liberties.

Kenneth Clarke, with his track record of lengthy service in senior office, would be a more traditionally paternalist Tory leader, a throwback to a time when the party savoured an almost unchallenged right to govern. Clarke offers familiarity, but this is both a strength and weakness: he is a reminder of a time when the Conservatives enjoyed success but is also a relic of an age that has passed.

Beginning next week, the Conservatives must decide whether they intend to move on or risk stagnation. Inevitably, this conference is billed as a beauty parade of leadership hopefuls in a re-run of the 1963 gathering in the same town after Harold Macmillan resigned. But it is more important even than that.

The greatest danger the party faces is the 'one more heave' mentality. This is the belief that the last election – in which Labour secured just 36% of the vote and only 22% of the potential electorate – demonstrated a fatal weakness in the government that an apparently popular leader like Clarke could exploit. The argument here is that he can win back former Tory voters who have deserted to Labour or the Liberal Democrats in a way that Davis, more associated with the Right, cannot.

The opinion polls certainly suggest that, among the electorate at large, Clarke is the Conservative they most admire – but this is as much a function of his grandee status as anything else. He is, simply, someone people know and recognition translates into support in surveys, but not necessarily at the ballot box.

If anything, the last election was worse for the Conservatives than 2001, despite the gain of 30 seats. In a fascinating analysis of the result, Michael Portillo, who once harboured hopes of the leadership himself, pointed out that most of the Tory gains occurred because the LibDems took votes from Labour while Conservative support was unchanged.

In 2005, Labour lost a number of seats that it had taken from the Tories in the 1990s, but they went to the LibDems. After 2001, the Conservatives were in second place in 356 seats, but after May this year, they are second in only 269 constituencies. In other words, should Labour falter at the next election, the LibDems are as well placed as the Tories to pick up the seats.

Moreover, at the May election, the Conservative proportion of the poll fell in Labour-held seats, as it did in every sub region of the Midlands and northern England. The party came third among voters below the age of 34. In the major cities and towns, in Scotland and Wales, the Conservatives are either unrepresented or have established only a precarious toehold. Deciding to just hang on in there, in the hope that the political pendulum will swing inexorably back in their direction, would be a mistake of historic proportions.

But if they opt for Davis and radical reform of tax, spending and the public services, they have the equally daunting task of persuading the country that such a programme is both deliverable and desirable. Talk of flat taxes, welfare cuts, private insurance, education vouchers, self-governing hospitals, elected police chiefs and the like is all well and good in the cosy environs of a think-tank seminar but can sound distinctly unpalatable when exposed to scrutiny on Radio 4's Today programme or election hustings.

To some extent, the Tories are helped by Labour's own programme of extending market-driven public services, although this might lose momentum as Tony Blair's premiership begins to wind down and Gordon Brown prepares to take over at Number 10. But if a post-welfare state future is to be mapped out, as it assuredly must be, then the proponent must be a committed and articulate champion of such a programme.

Davis, it should be remembered, although he was a minister in the last Tory government, really cut his political teeth in the somewhat unsung post he held between 1997 and 2001, as chair of the Commons Public Accounts Committee. It is from that vantage point that he could see how public services were failing to deliver what was promised and the amount of waste involved. Clarke, by contrast, spent some of his key years in office running the biggest Whitehall spending departments – Education, Health and the Home Office.

Davis provided an insight into his plans for the party in a recent speech to the Institute for Public Policy Research, a Blairite think-tank. It was this address that persuaded David Willetts, consistently the most thoughtful and visionary of the leading Tories, to throw in his lot with Davis and back his bid for the leadership.

Essentially, this speech served two purposes, setting out a coherent strategy for the Tories while acknowledging that Blair's appeal to the country was that he was trying to answer the right questions but was unprepared or unable to come up with the right answers. Just as Labour under Blair adopted many of the reforms wrought by Margaret Thatcher, so the Tories under Davis would seek to emulate Labour's attempts to improve public services. But they would do this in a way that provided greater value for money, empowered the practitioners, reduced the role of central government and offered greater social mobility and opportunity for all, he said.

Davis's message was that although Labour had spent vastly more money, it had failed to achieve the outcomes it sought because public services had been left largely unreformed. And while the middle classes could opt out of state-provided services if they did not work to their satisfaction, the poor were stuck with them.

'There are too many victims of state failure in Britain today. I want to be their champion, giving them genuine opportunity to live a fulfilled life. We will only achieve this by a radically different approach,' he said. 'Today's rigid structures in health and education work not in favour of the less well-off but, if anything, in favour of the affluent. A moment's reflection will show just why. In trying to get into a good hospital, the middle classes are generally more adept at finding the requisite information and making the necessary contacts.'

Davis identified the root of this problem as 'the near-state monopoly in health and education and excessive centralisation of power in the hands of politicians and bureaucrats'.

He added: 'The reason why standards are low, and value for money so poor, is because the present structures ensure precisely that. You have to focus on satisfying individual requirements, not go in for mass production. You have to change the structures and substitute choice and competition for monopoly and central diktat, if you want a different and a better outcome, especially for the poor.'

But Davis did not seek to rubbish everything Labour had done. In an arresting phrase, he described the government's aims as 'admirable' and lamented its failure to achieve them because Blair had not been able to carry through the structural changes that he might have achieved had his party let him.

Neither did Davis abuse the welfare state. As a boy brought up on a housing estate by a single mother, he was a beneficiary of the safety net it provided, never knowing real hardship even if life was difficult. Social cohesion was strong, said Davis, but it began to unravel as the state increasingly intruded into the way people lived.

'I want to achieve the aims that moderate Conservatives have always championed; a strong society based on a free economy, with opportunity for all,' said Davis. 'To achieve those aims we need the methods that have been championed by thinkers of the Right; decentralisation, less state intervention, competition and choice.'

No doubt Kenneth Clarke could, and will, make a similar speech – but the importance of Davis making it is that it sought to show that he was not some unreconstructed Right-winger unable to understand why people voted for Blair.

His task, now, is to convince firstly the Tory activists and then, if successful, the country, that a Conservative government really could deliver lower taxes and better public services.

It is noticeable that the LibDems also see the attractions of such a reform agenda, with much talk at their party conference not of taxing more but of taxing fairly, and not of spending more but of spending wisely. They, too, want to bring 'real power and accountability' to local communities and make public services more responsive to the people.

This is also the language that Labour is increasingly using, though the reality often clashes with the rhetoric, as with proposals to establish regional police forces when people are crying out for more locally based decision-making.

But the prospect arises that at the next election, there will be three parties all committed to public service reform, greater opportunity, more localism and steady or declining taxes. The difference will be in the degrees of radicalism on offer, although the Tories under Clarke would be less easy to differentiate from the others than they would under Davis.

So, there is the choice. Do the Conservatives opt for a leader who some LibDems and Labour voters say they would be comfortable with, or risk the more radical route with all the dangers that lurk in the undergrowth along the way? Or do they throw all caution to the wind and embrace a young and unknown suitor who might offer them the same rejuvenation that Blair gave Labour? At Blackpool next week, the various contenders will have a platform not just to make a personal claim to the leadership but also to map out a coherent strategy for the centre Right.

When Michael Howard formally relinquishes his position, he will invite the Tories to make their fifth leadership choice in the 15 years since Thatcher was unceremoniously ditched from office – and it could be the most crucial. A fourth election defeat, especially if it involves coming third to the LibDems, as Kenneth Clarke recently suggested it might, could prove terminal.

Philip Johnston is home affairs editor of the Daily Telegraph

PFsep2005

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